Railroads say they're staying on track

A freight train winds up a grade near San Bernardino, Calif. - David McNew/Getty Images

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KAI RYSSDAL: Cholesterol drugs were bad on Wall Street today. Choo choo trains were pretty good. The Dow Jones Transportation Index picked up almost .8 percent. Railroads haul consumer goods all over the place, so train traffic's one way to measure consumer demand.

As you might expect, those figures do reflect a softening domestic economy, and imports are down, but as Marketplace's Jeff Tyler reports, business still hasn't gone off the rails.

JEFF TYLER: Housing woes have affected rail traffic. Shipments of lumber and wood products are down 20 percent from a year ago, and consumer worries are evident in car shipments. Motor vehicles are down 7 percent. Tom White is with the Association of American Railroads.

TOM WHITE: Ever since the dollar began to weaken, the volume of traffic has dropped off, and so far this year, we're down about 4 percent from last year.

But while imports from Asia have tapered off, the weak dollar has boosted exports of coal and grains, and White says high fuel prices make rail transport more attractive.

WHITE: Our fuel efficiency is better than three-to-one advantage over highway. We can move a ton of freight 423 miles on a single gallon of fuel.

Rail companies beat Wall Street expectations for the first quarter, and industry consultant Tom Murray predicts the trend will continue.

TOM MURRAY: The expectation in the rail industry is that this is a temporary lull.

He says companies are using this lull to invest in rail infrastructure, expecting better times around the bend.

Jeff Tyler is a reporter for Marketplace’s Los Angeles bureau and reports on issues related to immigration and Latin America. Tyler began his career at Marketplace producing and editing stories and in 2000 his desire to report allowed him to move to the other side of the...